The state of Texas is in the southern United States. If you are a resident of Texas and any of its counties you will have to file your bankruptcy proceedings in Texas. Because of the size of the state there are 4 bankruptcy courts operating in the state of Texas. They are the Texas Eastern bankruptcy Court, Texas Northern Bankruptcy court, Texas Southern Bankruptcy Court and the Texas Western Bankruptcy court. Bankruptcy by itself is not a magic wand for solving all your financial ills. But you will have to decide whether bankruptcy is the right option for you. However you may consider filing for bankruptcy in Texas if you are unable to clear your minimum amounts due on your bills or is getting notices from your lenders that your mortgage or loans are being foreclosed.
Again if you have had a loss of job or a divorce or a major illness and resultant expenses then perhaps bankruptcy may be help full for you. However do bear in mind that in bankruptcy Texas filing for bankruptcy proceedings does not absolve you of your liability towards alimony, child support, student loans, government taxes and any luxury goods purchased with a value of $550 or more during the last 90 days before filing for bankruptcy. In addition fines and penalties of government agencies and cash advances of more than $825 and above within the last 70 days of filing of the bankruptcy are also not covered.
As a consumer, you can file for Texas Bankruptcy under either chapter 7 or chapter 13 of the Federal act as amended in 2005.
Chapter 7 is a simple and quick form of bankruptcy .It is available to individuals, married couples, corporations and partnerships. A trustee (appointed by the court) gathers and sells your non-exempt property and uses the proceeds from the sale to pay your creditors.
Do remember that almost all chapter 7 cases are classified as ‘no-asset’ case, which simply means that the person filing the bankruptcy proceedings in Texas bankruptcy court does not have any non-exempt property which the trustee can sell.
Federal bankruptcy laws emphasize on an income test or a means test to determine whether you are eligible to file Chapter 7 bankruptcy. You can file in bankruptcy Texas court only if your income is below the median income for families in Texas. The Census Bureau statistics figures and date will be the reference point.
If your income is more than the median income for families in Texas over an average for the last six months along with mortgage and car payments, back taxes and child support due, and school expenses up to $1,500 per year then you wont be eligible to file under chapter 7. You won’t be eligible for a Chapter 7 bankruptcy if, after youre living expenses are provided for as per the Internal Revenue Service’s national collection standards, you can still afford to pay at least $6,000 ($100/month) to unsecured creditors over five years.
If you don’t qualify for a Chapter 7 bankruptcy, your only option would be to file under Chapter 13 bankruptcy. The U.S. Trustee Program will apply the median family income data to all cases filed on or after February 1, 2007.
For Texas, the median income for a single wage earner is $34,418. If you are a family of two then the median income is $48,849 and for a family of three the median income is $51,678. This goes up to $59,639 for a family of four. However for cases filed on or before March 31, 2007 a sum of $6,300 for each individual in excess of 4 may be added. For cases filed on or after April 1, 2007 the amount to be added for a family in excess of four is $6,900.
In bankruptcy Texas you will have to obtain approved credit counseling before you can file bankruptcy and file any overdue tax returns within weeks of filing a Chapter 7 bankruptcy. Across the United States, there are qualified bankruptcy lawyers available in Texas bankruptcy laws. Most bankruptcy lawyers in Texas will give you a free initial consultation to evaluate your financial situation.